Apple Reports Labor, Safety Problems at Suppliers

SHANGHAI -- Apple Inc. says its audits found labor, safety and other abuses by its suppliers in 2010, though it praised Taiwanese manufacturer Foxconn for saving lives through its handling of a spate of suicides at its factories in China.

The findings, outlined in Apple's annual supplier responsibility report, prompted local reports Wednesday to decry the "high price" paid by Chinese workers who assemble hit gadgets like the iPod and iPad.

"Apple Releases Supplier Report: Chinese Environmental Groups Dissatisfied," said a headline Wednesday in the state-run newspaper 21st Century Business Herald. "China Pays a High Cost for Apple's Success," said the Shanghai Daily.

Apple's report lists steps the company has taken to deal with underaged workers, involuntary or debt-bonded labor and unsafe handling of dangerous chemicals, among other abuses found in audits of 127 production facilities.

Cupertino, California-based Apple has sought to keep secret details of its production in China, where many of its top gadgets are assembled. But a string of suicides at the heavily regimented factories of Taiwan-owned Foxconn Technology Group last year drew unwelcome attention to conditions faced by workers in China who put iPhones and other devices together.

Meanwhile, the company said it was working with Foxconn, a major supplier to many electronics makers, to help prevent further suicides at its factories, which employ more than 920,000 people and are expanding into China's inland areas.

"We were disturbed and deeply saddened to learn that factory workers were taking their own lives," said the report. It praised Foxconn's improved support for its mostly young, migrant work force and said an independent investigation had found Foxconn's handling of the problem "had definitely saved lives."

Apple said its audits found 91 underaged workers at 10 Chinese factories.

China allows employment only from age 16, although many children leave school before then. In the worst example, Apple said it stopped doing business with a factory that had hired 42 underaged workers supplied by a vocational school that had falsified their documents.

Apart from other labor problems, such as excess working hours, the company said that it required suppliers to reimburse $3.4 million in overcharges by employment agencies that provided contract migrant laborers from various countries in Asia, such as the Philippines, Thailand, Indonesia and Vietnam to factories in Taiwan, Malaysia and Singapore.

The report acknowledged other troubles, such as inadequate safety provisions at factories, including one case last year in which dozens of workers were poisoned by unsafe handling of the chemical n-hexane at a factory in Suzhou, near Shanghai.

Apple said it required the supplier, Wintek, to stop using the chemical and repair its ventilation system and will audit the factory again this year to ensure it is complying with its standards.

Chinese environmental groups are growing increasingly outspoken on such issues and a report released last month by three dozen groups, "The Other Side of Apple," accused the company of being the least responsive to health and safety concerns among more than two-dozen companies that were surveyed.

While contracts for Apple components are lucrative, the company's rigid quality standards led contractors to do whatever they can to ensure their products pass muster, the 21st Century Business Herald said, citing Chinese environmentalist Ma Jun, whose Beijing-based Institute for Public & Environmental Affairs helped compile the "Other Side" report.

Ma said Wintek had gotten better results using n-hexane, a solvent that can cause nerve damage, rather than alcohol to clean screens and switched to the more toxic chemical without telling Apple.

Overall, Apple said it ordered changes by 80 suppliers that were found to be mishandling or improperly storing hazardous chemicals.

The Institute for Public & Environmental Affairs welcomed what it called Apple's "positive steps" in acknowledging the poisoning at Wintek, but said its claim that all the workers affected had returned to work was "highly conflicting" with what the workers have said.

"Many of them have been categorized as occupationally disabled. Their condition therefore makes it dangerous for them to return to the Apple production line and to be exposed to chemical substances such as acetone," it said in a statement Wednesday.

The NGO also chastised Apple for not providing specific details about other environmental risks, saying it was studying further cases it had found.